For its third generation, the American emerged with what would be its only completely new design. The entire line was treated to neat and trim lines with pleasing simplicity (compared to the more boxy predecessors) with characteristic tunneled headlights with a simple horizontal grille between them. The Rambler American's wheelbase grew by six-inches or 152 mm (to 106 in or 2692 mm) and the interiors were made more spacious.The station wagons in the restyled 1964 series came with four doors and gained 17% more cargo space compared to the previous design. They all featured a new roll-down disappearing rear window for the bottom-hinged tailgate. Full coil front springs along with soft rear leaf units, gave the new American an unusually smooth ride, better than many larger domestic cars. The new models also incorporated various parts and components (such as doors) that were interchangeable with AMC's larger cars. In essence, the new body was a shorter, narrower version of the previous years new Rambler Classic.

The new styling was the work of designer Richard A. Teague, who would go on to design the 1968 Javelin and AMX. Many viewed the newly designed station wagon as the best looking of any American wagon, with its new, trim lines and ample passenger and cargo room. Led by the top-line 440-series convertible, they were arguably the 1964's most attractive Detroit compacts. Car Life magazine titled its road test of the 1964 Rambler American: "The Original Plain Jane Compact Car Just Got Back From the Beauty Parlor".

1966

As the automobile marketplace in the U.S. was moving away from economy and toward performance and upmarket vehicles, American Motors began removing the historic Rambler name from its larger models. However, the American and Classic models retained their economy car marketing image and their traditional nameplate. To cement this image, a Rambler American was again the overall winner in the Mobil Economy Run. The mid-trim level 330 model was dropped, leaving the top 440 and base 220 models in the lineup for 1966. The top of the line model, available only as a two-door hardtop, saw its name changed from 440-H to Rogue.

The American models were facelifted for the 1966 model year with more squared-off front and rear styling. The front of the car was extended to add three inches (76 mm) to the inside of the engine compartment. This allowed optional air conditioning to be installed with the new 199 and 232 in-line six-cylinder engines, which were longer than the previous 195.6 versions.

A completely new 290 cu in (4.8 L) "Typhoon" V8 engine was developed by AMC and it saw its introduction in a special mid-1966 Rogue model. Available in 200 hp (149 kW; 203 PS) two-barrel carburetor version or producing 225 hp (168 kW; 228 PS) with a 4-barrel carburetor and high compression, the new engines utilized "thin-wall" casting technology and weighed only 540 pounds (245 kg). The newly powered Rogue came with a 3-speed automatic transmission or a floor mounted 4-speed manual, and made the car "suitable for the Stoplight Grand Prix." American Motors' new engine design would expand in power and in applications across the company's passenger cars, as well as eventually in Jeeps, and then continue to be assembled through 1991 for the Jeep Grand Wagoneer; long after AMC was sold to Chrysler.